German pension abroad: tax returns and dealing with the German tax office

Is your German pension taxable if you live abroad?

Many German retirees spend their retirement abroad. According to the German statutory pension insurance (Deutsche Rentenversicherung), around 1.7 million pensions were paid abroad in 2023, many of them to people without German citizenship, but many also to Germans. Whether Spain, Turkey, Thailand or Portugal: a milder climate and lower living costs are attractive.

What many people do not consider: in most cases, the German pension remains taxable in Germany, depending on the tax treaty with your new country. And if you live abroad, you have additional obligations and risks.

Since 2005, pensions have been taxed more heavily step by step. For people whose pension starts in 2026, 84 % of the pension is taxable. The taxable share rises to 100 % for pensions starting in 2058 (§ 22 no. 1 sentence 3 (a) (aa) EStG).

Which tax office is responsible for you?

Neubrandenburg is responsible if a German pension is your only German income: the Neubrandenburg tax office, unit for pension recipients abroad (Finanzamt Neubrandenburg, Rentenempfänger im Ausland, RiA), is the only tax office in Germany with this nationwide responsibility. If you have other income in Germany, another tax office may be responsible.

Its letters are in German, and without an ELSTER account, you get its tax assessment notices on paper. The tax office regularly sends:

• Requests to file a tax return
• Income tax assessment notices (Einkommensteuerbescheide)
• Demands for additional payment, and refunds
• Information letters about changes in the law

Limited tax liability: what does it mean?

Retirees abroad are usually subject to limited tax liability (beschränkte Steuerpflicht) under § 1 (4) EStG. This has concrete effects:

• No basic tax-free allowance: unlike with unlimited tax liability, there is no tax-free basic amount (Grundfreibetrag)
• Most special expenses are not deductible: many deductions are not available

Unlimited tax liability on application: if certain income limits are met, you can be treated as having unlimited tax liability (§ 1 (3) EStG). This is often more favourable, but it requires a formal application to the tax office.

Check it with a tax adviser: your foreign income can then raise the tax rate on your German income (progression clause, Progressionsvorbehalt). Whether this option pays off in your case is a question for a tax adviser.

Which deadlines apply, and what if you miss one?

The most important deadlines for retirees abroad:

• Tax return: by 31 July of the following year; if a tax adviser prepares it, by the end of February of the year after next (§ 149 AO)
• Objection deadline: one month after the tax assessment notice is notified (§ 355 AO)
• Payment: by the date stated in the notice; for an income tax assessment, usually one month after notification (§ 36 (4) EStG)

What happens if you miss a deadline?

1. The tax office estimates your income, often far too high
2. A late filing surcharge (Verspätungszuschlag) can be set. If you do not file within 14 months after the end of the year, it must usually be set: 0.25 % of the assessed tax less advance payments and tax withheld, for each month or part of a month, at least €25 per month (§ 152 (2), (3) and (5) AO)
3. Late payment surcharges (Säumniszuschläge) are added: 1 % of the overdue tax, rounded down to the nearest €50, for each month or part of a month (§ 240 AO)
4. In the worst case: enforcement and seizure of your bank account

Why is post a problem for retirees abroad?

Most retirees abroad have one thing in common: they no longer have a reliable address in Germany. Nobody empties the old letterbox, a mail forwarding order with Deutsche Post only runs for a limited time, and friends who promised to “have a look now and then” forget.

Deemed delivery applies at the same time: a letter that the tax office sends abroad counts as notified one month after posting, unless it arrives later or not at all (§ 122 (2) AO). If you live outside the EU and the EEA, were asked by the tax office to name an authorised recipient (Empfangsbevollmächtigter) and did not do so, in practice it is up to you to show that it arrived later or not at all (§ 123 AO).

How does PortoDoc help retirees abroad?

PortoDoc offers retirees abroad:

Your own German address: Give the Neubrandenburg tax office your PortoDoc address: your postal address in Ahrensburg near Hamburg with your personal PD number. It is a delivery address for letters, not a business, registered-office or imprint address. Once the tax office has updated your address, its letters come to us.

Digitisation: We scan each letter and you get a notification. It is then available in your online account, which you open in the browser, also on your smartphone.

AI deadline hint: From the Business plan, an AI deadline hint marks possible deadlines, such as filing, objection and payment dates: a non-binding aid. The letter itself is what counts, and you (or your tax adviser) check every deadline yourself.

AI summary and translation: Every plan includes an English AI translation; depending on your plan, you also get an AI summary that explains complicated tax assessment notices in plain words: an aid, not tax advice; the original letter counts.

Conclusion

A German pension abroad is more complex for tax purposes than many people think. Without an ELSTER account, you get the Neubrandenburg tax office's notices on paper, and if this post does not reach you in time, you risk estimates, surcharges and, in the worst case, seizure. With PortoDoc, your official post arrives at a German address, is available digitally in your online account, and you get an e-mail when a new letter arrives.